KLM Axiva Finvest Limited

KLM Axiva Finvest Limited is a non-deposit taking and non- systemically important non-banking finance company ("NBFC") primarily serving low and middle income individuals and businesses that have limited or no access to formal banking and finance channels. The company had originally obtained a Certificate of Registration in the name of Needs Finvest Limited dated December 13, 1997 and subsequently, its name was changed to KLM Axiva Finvest Limited. Company operates primarily in three business verticals: (i) Gold Loan business, lending money against the pledge of household jewellery, (ii) Micro, small and medium enterprises loan, and (iii) Personal loan. Further, as a part of offerings, it also provides micro-finance loan to women customers and vehicle loan. As on August 31, 2018, the company operates through 79 branches across three states Kerala, Karnataka and Tamil Nadu managed by corporate office located at Kochi. Company's loan customers are typically businessmen, vendors, traders, farmers, salaried individuals and families, who for reasons of convenience, accessibility or necessity, avail of our credit facilities. To finance company's onward lending, financing, repayment of interest and principal of existing loans and general corpus fund needs, KLM is coming out with its maiden debt offer of Rs. 100 cr. via secured, redeemable non convertible debentures having a face value of Rs. 1000 per NCD. Minimum application is to be made for 5 NCDs (i.e. Rs. 5000) and in multiple of 1 NCD (Rs. 1000) thereon, thereafter. These instruments have tenure of 1 year, 2 years, 3 years , 5 years, and 6 years. It offers coupon rates ranging from 11.25% to 12.25% and the interest payment mode available for Monthly, Annually or Cumulative, as per the choice of investors.  As per financial performance, for last three fiscals, KLM has posted total income/net profits of Rs. 10.82 cr. / Rs. 1.64 cr. (FY16), Rs. 23.94 cr. / Rs. 2.13 cr. (FY17) and Rs. 42.73 cr. / Rs. 5.69cr. (FY18). Its debt-equity ratio will stand enhanced from 3.38 at present to 5.41 post issue. As of March 31, 2017 and March 31, 2018, KLM's AUM was Rs. 913.57 cr. and Rs. 1942.33 cr. respectively. Its AUM increased at a CAGR of 189.78% from Rs. 27.57 cr. as of March 31, 2014 to Rs. 1942.33 cr. as on 31.03.18. As on 31.03.18, its gross and net NPAs stood at 4.40% and 3.94% respectively. These were a bit higher compared to 4.23% and 3.78% respectively for FY17. The issue is rated CARE BB (outlook stable) by CARE Ratings Limited. This rating indicates that instruments with this rating are considered to have a moderate degree of safety regarding timely servicing of financial obligations. Such instruments carry moderate credit risk. As coupon rates are attractive, but there is risk also, so investors with risk capacity only should apply this.

• 1 Ms. Biji Shibu
• 2 Ms. Princy Josekutty